ARM vs. UMC: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at ARM and UMC, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
ARM’s market capitalization of 163.93 billion USD is substantially larger than UMC’s 19.66 billion USD, indicating a significant difference in their market valuations.
ARM’s beta of 4.10 points to significantly higher volatility compared to UMC (beta: 1.29), suggesting ARM has greater potential for both gains and losses relative to market movements.
ARM and UMC are both American Depositary Receipts (ADRs). This provides U.S. investors with straightforward access to investing in these foreign-listed companies without directly engaging with overseas stock exchanges.
| Symbol | ARM | UMC |
|---|---|---|
| Company Name | Arm Holdings plc American Depositary Shares | United Microelectronics Corporation |
| Country | GB | TW |
| Sector | Technology | Technology |
| Industry | Semiconductors | Semiconductors |
| CEO | Rene Anthony Andrada Haas | Jia Cong Hung |
| Price | 155.09 USD | 7.83 USD |
| Market Cap | 163.93 billion USD | 19.66 billion USD |
| Beta | 4.10 | 1.29 |
| Exchange | NASDAQ | NYSE |
| IPO Date | September 14, 2023 | September 19, 2000 |
| ADR | Yes | Yes |
Historical Performance
This chart compares the performance of ARM and UMC by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
ARM
12.71%
Semiconductors Industry
- Max
- 41.84%
- Q3
- 15.81%
- Median
- 6.31%
- Q1
- -5.54%
- Min
- -30.12%
ARM’s Return on Equity of 12.71% is on par with the norm for the Semiconductors industry, indicating its profitability relative to shareholder equity is typical for the sector.
UMC
12.46%
Semiconductors Industry
- Max
- 41.84%
- Q3
- 15.81%
- Median
- 6.31%
- Q1
- -5.54%
- Min
- -30.12%
UMC’s Return on Equity of 12.46% is on par with the norm for the Semiconductors industry, indicating its profitability relative to shareholder equity is typical for the sector.
Return on Invested Capital
ARM
11.37%
Semiconductors Industry
- Max
- 30.91%
- Q3
- 11.34%
- Median
- 4.08%
- Q1
- -2.17%
- Min
- -19.59%
In the upper quartile for the Semiconductors industry, ARM’s Return on Invested Capital of 11.37% signifies a highly effective use of its capital to generate profits when compared to its peers.
UMC
8.33%
Semiconductors Industry
- Max
- 30.91%
- Q3
- 11.34%
- Median
- 4.08%
- Q1
- -2.17%
- Min
- -19.59%
UMC’s Return on Invested Capital of 8.33% is in line with the norm for the Semiconductors industry, reflecting a standard level of efficiency in generating profits from its capital base.
Net Profit Margin
ARM
19.77%
Semiconductors Industry
- Max
- 51.69%
- Q3
- 19.67%
- Median
- 8.56%
- Q1
- -5.44%
- Min
- -38.60%
A Net Profit Margin of 19.77% places ARM in the upper quartile for the Semiconductors industry, signifying strong profitability and more effective cost management than most of its peers.
UMC
19.57%
Semiconductors Industry
- Max
- 51.69%
- Q3
- 19.67%
- Median
- 8.56%
- Q1
- -5.44%
- Min
- -38.60%
UMC’s Net Profit Margin of 19.57% is aligned with the median group of its peers in the Semiconductors industry. This indicates its ability to convert revenue into profit is typical for the sector.
Operating Profit Margin
ARM
20.74%
Semiconductors Industry
- Max
- 58.03%
- Q3
- 22.12%
- Median
- 8.40%
- Q1
- -3.73%
- Min
- -36.14%
ARM’s Operating Profit Margin of 20.74% is around the midpoint for the Semiconductors industry, indicating that its efficiency in managing core business operations is typical for the sector.
UMC
21.02%
Semiconductors Industry
- Max
- 58.03%
- Q3
- 22.12%
- Median
- 8.40%
- Q1
- -3.73%
- Min
- -36.14%
UMC’s Operating Profit Margin of 21.02% is around the midpoint for the Semiconductors industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | ARM | UMC |
|---|---|---|
| Return on Equity (TTM) | 12.71% | 12.46% |
| Return on Assets (TTM) | 8.87% | 8.05% |
| Return on Invested Capital (TTM) | 11.37% | 8.33% |
| Net Profit Margin (TTM) | 19.77% | 19.57% |
| Operating Profit Margin (TTM) | 20.74% | 21.02% |
| Gross Profit Margin (TTM) | 95.83% | 31.17% |
Financial Strength
Current Ratio
ARM
5.20
Semiconductors Industry
- Max
- 9.10
- Q3
- 5.23
- Median
- 3.09
- Q1
- 2.49
- Min
- 1.02
ARM’s Current Ratio of 5.20 aligns with the median group of the Semiconductors industry, indicating that its short-term liquidity is in line with its sector peers.
UMC
2.64
Semiconductors Industry
- Max
- 9.10
- Q3
- 5.23
- Median
- 3.09
- Q1
- 2.49
- Min
- 1.02
UMC’s Current Ratio of 2.64 aligns with the median group of the Semiconductors industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
ARM
0.05
Semiconductors Industry
- Max
- 0.97
- Q3
- 0.46
- Median
- 0.21
- Q1
- 0.05
- Min
- 0.00
ARM’s Debt-to-Equity Ratio of 0.05 is typical for the Semiconductors industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
UMC
0.15
Semiconductors Industry
- Max
- 0.97
- Q3
- 0.46
- Median
- 0.21
- Q1
- 0.05
- Min
- 0.00
UMC’s Debt-to-Equity Ratio of 0.15 is typical for the Semiconductors industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
Interest Coverage Ratio
ARM
--
Semiconductors Industry
- Max
- 36.25
- Q3
- 29.12
- Median
- 7.01
- Q1
- -1.22
- Min
- -18.18
Interest Coverage Ratio data for ARM is currently unavailable.
UMC
29.08
Semiconductors Industry
- Max
- 36.25
- Q3
- 29.12
- Median
- 7.01
- Q1
- -1.22
- Min
- -18.18
UMC’s Interest Coverage Ratio of 29.08 is positioned comfortably within the norm for the Semiconductors industry, indicating a standard and healthy capacity to cover its interest payments.
Financial Strength at a Glance
| Symbol | ARM | UMC |
|---|---|---|
| Current Ratio (TTM) | 5.20 | 2.64 |
| Quick Ratio (TTM) | 5.20 | 2.15 |
| Debt-to-Equity Ratio (TTM) | 0.05 | 0.15 |
| Debt-to-Asset Ratio (TTM) | 0.04 | 0.10 |
| Net Debt-to-EBITDA Ratio (TTM) | -2.31 | -0.47 |
| Interest Coverage Ratio (TTM) | -- | 29.08 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for ARM and UMC. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
ARM
0.00%
Semiconductors Industry
- Max
- 6.48%
- Q3
- 0.93%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
UMC
6.51%
Semiconductors Industry
- Max
- 6.48%
- Q3
- 0.93%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
UMC’s Dividend Yield of 6.51% is exceptionally high, placing it well above the typical range for the Semiconductors industry. While this may seem attractive, an unusually high yield can sometimes be a warning sign, reflecting a falling stock price or market concerns about the dividend’s sustainability.
Dividend Payout Ratio
ARM
0.00%
Semiconductors Industry
- Max
- 204.29%
- Q3
- 31.85%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
ARM has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
UMC
81.53%
Semiconductors Industry
- Max
- 204.29%
- Q3
- 31.85%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
UMC’s Dividend Payout Ratio of 81.53% is in the upper quartile for the Semiconductors industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.
Dividend at a Glance
| Symbol | ARM | UMC |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 6.51% |
| Dividend Payout Ratio (TTM) | 0.00% | 81.53% |
Valuation
Price-to-Earnings Ratio
ARM
206.59
Semiconductors Industry
- Max
- 86.15
- Q3
- 47.38
- Median
- 27.87
- Q1
- 18.89
- Min
- 4.73
At 206.59, ARM’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Semiconductors industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
UMC
11.85
Semiconductors Industry
- Max
- 86.15
- Q3
- 47.38
- Median
- 27.87
- Q1
- 18.89
- Min
- 4.73
In the lower quartile for the Semiconductors industry, UMC’s P/E Ratio of 11.85 suggests the stock may be undervalued compared to its peers, potentially presenting an attractive entry point for investors.
Forward P/E to Growth Ratio
ARM
7.75
Semiconductors Industry
- Max
- 4.73
- Q3
- 2.80
- Median
- 1.11
- Q1
- 0.68
- Min
- 0.01
The Forward PEG Ratio is often not a primary valuation metric in the Semiconductors industry.
UMC
0.78
Semiconductors Industry
- Max
- 4.73
- Q3
- 2.80
- Median
- 1.11
- Q1
- 0.68
- Min
- 0.01
The Forward PEG Ratio is often not a primary valuation metric in the Semiconductors industry.
Price-to-Sales Ratio
ARM
40.91
Semiconductors Industry
- Max
- 21.96
- Q3
- 10.21
- Median
- 4.45
- Q1
- 2.32
- Min
- 0.48
With a P/S Ratio of 40.91, ARM trades at a valuation that eclipses even the highest in the Semiconductors industry. This implies the market has priced in exceptionally optimistic scenarios for future revenue growth, posing considerable valuation risk.
UMC
2.33
Semiconductors Industry
- Max
- 21.96
- Q3
- 10.21
- Median
- 4.45
- Q1
- 2.32
- Min
- 0.48
UMC’s P/S Ratio of 2.33 aligns with the market consensus for the Semiconductors industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
Price-to-Book Ratio
ARM
23.92
Semiconductors Industry
- Max
- 13.12
- Q3
- 6.49
- Median
- 3.31
- Q1
- 1.74
- Min
- 0.23
At 23.92, ARM’s P/B Ratio is at an extreme premium to the Semiconductors industry. This signifies that the market’s valuation is heavily reliant on future potential rather than its current net asset value, which can be a high-risk proposition.
UMC
1.40
Semiconductors Industry
- Max
- 13.12
- Q3
- 6.49
- Median
- 3.31
- Q1
- 1.74
- Min
- 0.23
UMC’s P/B Ratio of 1.40 is in the lower quartile for the Semiconductors industry. From a value investing perspective, this is favorable, as it suggests the stock is trading at a discount to its net asset value and may offer a greater margin of safety.
Valuation at a Glance
| Symbol | ARM | UMC |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 206.59 | 11.85 |
| Forward PEG Ratio (TTM) | 7.75 | 0.78 |
| Price-to-Sales Ratio (P/S, TTM) | 40.91 | 2.33 |
| Price-to-Book Ratio (P/B, TTM) | 23.92 | 1.40 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 1011.91 | 26.88 |
| EV-to-EBITDA (TTM) | 216.85 | 4.78 |
| EV-to-Sales (TTM) | 40.48 | 2.12 |